MARKET INSIGHTS

The Latin America green data center market was valued at USD 455 million in 2021 and is expected to reach USD 825 million by 2027, growing at a CAGR of 10.43% from 2022 to 2027. A green data center is focused on the sustainability of the data center. The region's increasing digitalization, previously underserved status, the shift to the cloud, the growing popularity of IoT and big data, the emergence of 5G networks, the COVID-19 pandemic, and the demand for high-speed streaming of online entertainment content are some of the major factors driving the growth of the Latin American data center market. With the tremendous growth in data center deployment, the green data center market is becoming a leading trend in data center development and operations.

 Key Highlights of the Industry :

• Policy drivers and regulations such as The Paris Agreement, the RE100, and certifications such as Leadership in Energy and Environmental Design (LEED) and ISO50001 drive Latin America green data center market development market.
• Significant contributors to green data center development in Latin America include Brazil, Chile, Argentina, and Paraguay, among others. Data center operators and governments are working towards adopting renewable energy and other measures.
• Hyperscale operators in Latin America, including Google, Microsoft, Amazon Web Services, and Huawei Technologies, are driving the market in terms of sustainable investment and innovative technologies.
• Data center operators such as HostDime, KIO Networks, and Scala Data Centers, among others, are focused on building data centers with a PUE of
• Renewable energy providers continuously increase their non-fossil fuel energy portfolio by investing in several new regional projects. Hydropower leads the market, followed by other solar, wind, and biomass sources.

LATIN AMERICA GREEN DATA CENTER MARKET TRENDS AND DRIVERS

Innovations in Power and Cooling Technology are Driving the Market for Green Development

Innovations in data center power technology include the adoption of lithium-ion and smart grid UPS systems and the adoption of DRUPS systems in Latin America. Fuel cells’-based power backup is also expected to make an entry into the Latin American market in the long term, driving down investments in inefficient diesel generators and driving the market for efficient products. A tropical test bed is currently in Singapore's testing phase, making data centers more efficient in a tropical climate. If successful, this can also positively impact the Latin American market and further bring down the PUE of facilities. Free cooling is also being adopted by data center operators in facilities in countries like Brazil, Chile, Argentina, and the Caribbean, at least partially. For instance, Equinix uses free cooling in its SP3 data center in Sao Paulo. 

Government push toward Sustainability

Various Latin American governments, including those of Chile, Brazil, and Uruguay, are actively working towards increasing the adoption of renewable energy in the country. The Development Bank of Latin America has approved a loan of $300 million to Uruguay to strengthen its electricity grid and modernize it, driven by the government.

Deployment of Modular Data Centers and Sustainable Material gathering steam

The cost of operating a modular data center is around 30% less than that of a traditional data center facility, making it an attractive proposition in Latin America and driving the growth of the Latin America modular data center market, owing to many operators having limited funds for data center development.

The environmental impact of modular data center deployment is also lower since it entails lower or no usage of concrete can be constructed in a phased manner and eliminates the need for additional labor.

Plant-based and other sustainable materials such as wood, hemp, and Mycelium, which can revolutionize the construction process for data centers, are also being adopted by data center operators.

GEOGRAPHICAL ANALYSIS

Among the Latin American countries, Brazil, Columbia, Argentina, and Paraguay are among the countries that have actively adopted renewable energy for most of their energy requirements.

Countries such as Mexico are also expected to ramp up their renewable energy adoption in the coming years, especially owing to worldwide and regional policies promoting the use of renewable energy. In Mexico, just over 30% of the energy mix is renewable.

In Argentina, around 26 large-scale renewable energy projects were commissioned in 2021, adding over 1GW of renewable energy. The energy capacity increased approximately 24% in 2021 compared with 2020.

VENDOR ANALYSIS

Larger colocation and hyperscale data center operators driving the market

Hyperscale operators like Google and Microsoft actively drive renewable energy adoption in Latin America. For instance, in December 2021, Google launched its cloud region in Santiago, powered by solar energy procured from ACCIONA Energia's El Romero photovoltaic plant.

Colocation operators such as ODATA and Scala Data Centers are active adopters of renewable energy in Latin America. For instance, Scala Data Centers signed a Power Purchase Agreement (PPA) with ENGIE Brasil Energia in 2021 to supply over 1,600 GWh of renewable energy to the operator until 2033.

Some major renewable energy producers and suppliers in the Latin American market include Enel Green Power, Engie, GreenYellow, and The AES Corporation.